Union Cabinet approves phasing out Central Sales Tax (CST) and compensation to the States for revenue loss on this account

The Union Cabinet today gave its approval for initiating the process of phasing out CST with reduction in the CST rate from 4% to 3% w.e.f. 01.04.2007, taking necessary non-monetary and monetary measures for the purpose and making the necessary amendments to the Central Sales Tax Act, 1956, and the Additional Duties of Excise (Goods of Special Importance) Act, 1957.

This will mark the beginning of the process of a very significant tax reform measure, which is critical for success of VAT and for introduction of GST in future. This will facilitate the process of developing a National Common Market.

A Bill, namely the Taxation Laws (Amendment) Bill, 2007 will be introduced in the coming session of the Parliament.

Source : Press Information Bureau

Keywords